Accessing finance at key moments is very often absolutely critical for small and medium-sized businesses (SMB) and for obvious reasons. Whether the aim is to get started, to pursue growth opportunities or simply to stay in business, getting your hands on the cash you need as an SMB is essential.
The problem is that banks aren’t always ready to offer loans or financing facilities that SMBs need and in many cases they’re reluctant to lend money even to perfectly viable and successful companies. The good news is that there are now a growing array of alternative routes to finance available to companies of all sizes and across a full range of different industries.
Here’s a look at some of those that are well worth considering as options beyond mainstream financial institutions.
Fast business loans
It is very important not to rush into any financing deal as a business boss but, on the other hand, time is very often of the essence for small and medium-sized companies in competitive industries. Therefore, so-called fast business loans can be a priceless lifeline for SMBs who need quick and straightforward access to loans for their businesses. As with all loans, the types of deals available vary but it is possible to secure a fair and reasonable rate though an online loan providing platform in a matter of minutes.
This form of financing solution is generally aimed at businesses who are facing cash flow pressures and have considerable value tied up in specific assets. The process essentially involves a company selling its assets, which might be machinery or a fleet of vehicles for example, and leasing them back in a way that opens up access to upfront cash amounts.
Another popular route to fresh finance for a growing number of SMBs is what’s called invoice factoring, which is a means of freeing up cash in the short term by selling the rights to money assumed to be incoming in relation to specific invoices. Waiting for invoices to be paid in full can be not just frustrating but seriously damaging for SMBs in situations where cash flows are tight and invoice factoring is now a popular means of overcoming these problems.
Peer to peer (P2P) lending is another increasing popular form of financing for businesses that has emerged to prominence in recent years. The process is made possible via online platforms of various sorts and essentially brings together business men and women in need of financing with investors looking to derive profits in return for that backing. Rates vary and can sometimes be relatively high but P2P loans can be secured within a matter of hours and so they are often a good way for businesses to secure the funding they need to make progress.
Crowdfunding works in a similar way to P2P lending but rather than securing loans through online platforms, businesses are able to offer the opportunity for investors to back their ideas and their ambitions. The idea is that third parties can come along and provide a certain degree of financial support in return for a share of a business and its future profits.
The days when banks were the only option in town for SMBs in need of financing are well and truly over. It’s always important not to make rash decisions in this context but when it comes to securing new funds for your business there are now more viable, reputable and realistic routes to funding available than there ever has been before.